WASHINGTON (AFP) – United States (US) service sector activity grew less than analysts expected in the final month of 2023, according to survey data published on Friday, as growth of new orders slowed.
The services index of the Institute for Supply Management (ISM) came in at 50.6 per cent in December, down 2.1 percentage points from November, the report showed.
December’s release nevertheless marked the 12th straight month in which the ISM services index was above the 50-point threshold marking growth in the sector.
With the exception of December 2022, the services sector has expanded in 42 out of the last 43 months.
This stands in sharp contrast to the manufacturing sector, which has contracted for 14 straight months, according to ISM.
“The services sector had a pullback in the rate of growth in December, attributed to the decrease in the rate of growth for new orders and contraction in employment,” ISM survey chair Anthony Nieves said in a statement.
He added that respondents to the survey raised concerns “related to economic uncertainty, geopolitical events and labour constraints”.
Nine service industries reported growth in December, including agriculture, retail trade, as well as health care and social assistance.
A further nine industries saw decline, including real estate, arts, entertainment and mining.
“The services ISM index deteriorated in December, falling to the lowest level since May,” High Frequency Economics chief US economist Rubeela Farooqi wrote in a note to clients.
